Sunday, February 21, 2010

Disney's New Strategy

Robert Iger's free-spending ways have caught up to him. Having purchased Pixar and Marvel for a combined total of $10 billion, the studio has to start making some serious coin in order to pay off the purchases.

The strategy is to focus on $150 million films that can be heavily merchandised or films that cost less than $30 million. Anything that falls in the middle of those two budget neighborhoods is out, even if it's a proven money maker. The Proposal, a Sandra Bullock film that cost $40 million and that grossed $315 million worldwide won't have a sequel as a result of this policy.

The franchise-intensive mantra came after Disney CEO Robert Iger admitted publicly and unflinchingly that 2009 had been "awful": Having started the year with Confessions of a Shopaholic (domestic gross: $44 million) in the worse recession of all time, it then summered with the costly $150 million rodent flop G-Force (domestic gross: $119 million), and spent the end of the year eating turkey upon turkey: The Bruce Willis action flick Surrogates (domestic gross: $38 million) was laughable; the comedy Old Dogs (domestic gross: $48 million) was not.

To help pay for the whopping $10 billion Disney spent acquiring Pixar and Marvel in recent years, Iger decreed that s the world's largest licensor of consumer products, Disney needs its film not to merely succeed in theaters, but to sell gobs of spinoff merch, as well: In 2008, the company sold some $30 billion worth of licensed consumer products, and suffice it to say, exactly none of that came from Sandra Bullock hand towels.

The problem, as I see it, is that this is a high risk strategy. G-Force proves that. It's at exactly the budget that Iger thinks is going to save the company. Flops at that budget level will hurt badly.

If Eisner's tenure was defined (at least initially) by how successfully he capitalized on Disney's brand, Iger's tenure is going to be defined by how his purchases affect the bottom line. He's dug himself a $10 billion hole and now he has to climb out of it.

13 comments:

If that is an absolute decree from Iger to make either $150 million dollar budgeted films OR $30 million (or under) budgeted films then that will have quite an impact on any future hand-drawn animated movies from Disney.

The Princess & the Frog budget was widely reported as $105 million , which seems high to me , but they may very well have tacked-on a lot of R&D startup and other misc. costs to the PATF production budget. Artist pay rates were much tighter than on previous films and a lot of clean-up work was outsourced to studios where the artists made even less than the union-scale artists in Burbank. No big name stars as voices. So how did the budget climb to $105 million ?

The Winnie the Pooh movie they are currently doing is said to have a budget of "1/3 the cost of PATF" (this via the Animation Guild blog) , so 1/3rd of $105 million would be $35 million which fits roughly into the "$30 million" range for the low-end movies that Iger wants.

Disney should (but I doubt they will) take a close look at the upcoming animated feature "The Illusionist" (budget reported at equivalent to $22 million U.S.D) . I've seen clips from "The Illusionist" and it looks great. It's full animation , as was Chomet's previous film "The Triplets of Belleville" which cost about $10 million U.S.D.

If Chomet can do a film that looks as good as "The Illusionist" for $22 million, then why shouldn't Disney be able to make a good animated feature for $30 million ? Unfortunately I think the present production model at Disney is stacked against making a truly director-driven movie with one person calling the shots as was the case in Chomet's "The Illusionist" and "The Triplets of Belleville".

The Pooh movie , as a sequel, has certain things going for it upfront that will keep the budget down: known characters which are already designed , previous animation and art direction that is a model to follow in terms of style , a small cast. However, I think Chomet proves that it can be done with movies that are not sequels . I would like to see Disney strike off in a bolder direction than yet another "Pooh" sequel, and I would think that a lower budgeted movie would give them the opportunity to take a bit more of a risk with original material.

Maybe I'm out of touch, but I don't think it would necessarily be a bad thing to see Disney doing hand-drawn movies with lower budgets. Many times lower budgets will force more creative decisions to be made. However, it will be a sad thing if lower budgets mean only sequels to established franchises like Pooh.

I grew up with the Disney films of the 60s and 70s, and I think they were onto something quite practical back then. At that time, Disney was only putting out an animated feature every three years on average, as it was a rather expensive venture. What lowered their risk was the amount of "potboiler" live-action comedies they put out during those years in order to keep the money flowing into the Studio coffers. Even though these films were relatively inexpensive to produce, there was a genuine goodnatured charm to them, and some of them (like "The Absentminded Professor" and "The Love Bug") would even rank as minor classics.

In those days, Disney seemed to operate more like the other studios had in earlier decades, keeping a stable of contract players that they'd use in various films. Critics may dismiss them, but for moviegoing kids of that era, we enjoyed all of those films which featured familiar faces like Fred MacMurray, Suzanne Pleshette, and the extremely likable Dean Jones, to name but a few. All of these films featured engaging personalities, fun music scores (more jazz influenced as opposed to today's rock saturated crap), and relatively handsome production values all around.

Back then, it seems to me that The Disney Studio used these entertaining potboiler comedies to offset any potential losses incurred by either their animated features or more extravagant live-action fare like "Mary Poppins", "The Happiest Millionaire" and "Bedknobs and Broomsticks". While "Mary Poppins" was a bonafide box-office hit, Disney could never be certain that other big budget projects would also show successful profit, so the potboilers lessened that financial risk taking.

I think the problem that has existed at Disney ever since Eisner took over in 1984, and persists now with Iger at the helm, is that management believes that every film has to pay for itself or it's not worth producing. If they accepted the old method of using inexpensive, yet entertaining films to help pay for the riskier fare, then maybe we'd start seeing some better films again with timeless appeal. I am not optimistic however.

I predict a few films to come out of this strategy that will make "Beverly Hills Chihuahua" look like "The French Connection". And with some $150mil ones, screengrabs from the film will be used on message forums for years.

I'm actually happy that "The Proposal" WON'T have a sequel. I love that film, and with its ending, it's especially proof that a sequel can't improve over the original [something that star Sandra Bullock would know from the sequel at WB to "Miss Congenialty".]

PS Great to see Betty White in that, and in that Snickers Superbowl commericial that we've most all seen.

I don’t think so that entire corporation could crash with the help of one or two $150-million flops, the way United Artists did after "Heaven's Gate" in 1980, but the problem that has existed at Disney ever since Eisner took over in 1984, may now with Iger at the helm, is that management believes that every film has to pay for itself or it's not worth producing

About Me

I've worked as an animator, writer, producer and director in TV animation for 29 years. I created the cgi series Monster By Mistake.
I hold a Masters degree from York University in Cinema and Media Studies and am currently teaching animation at Sheridan College.
I can be contacted at mark(dot)mayerson(at)sheridanc(dot)on(dot)ca.